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Will AB InBev (BUD) Turn Around Earnings Performance in Q2?
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Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, is slated to release second-quarter 2017 results on Jul 27. Last quarter, the company delivered a negative earnings surprise of 26%.
In fact, AB InBev has reported negative surprise in each of the trailing four quarters, with an average miss of 29.3%. Let’s see how things are shaping up for this announcement.
The question lingering in investors’ minds now is whether AB InBev will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is $1.14, reflecting a year-over-year increase of 7.6%. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release. Analysts polled by Zacks expect revenues of $14.5 billion, up 33.9% from the year-ago quarter.
We note that the stock has underperformed the Zacks categorized Beverages – Alcohol industry in the last one month. The company’s shares have inched up 0.8%, while the Zacks categorized industry grew 3.3%.
Factors at Play
AB InBev is on track with the integration of the recently acquired brewing giant SABMiller. The company is currently in the process of divesting SABMiller assets that it promised as part of the merger deal. Despite the divestitures, this combined mega-brewing company still holds the top spot in the beer industry, controlling about one-thirds of the global beer market. This behemoth accounts for nearly 30% of global beer sales and 46% of global beer profits. Further, we laud AB InBev’s robust growth endeavors that have enabled it to maintain its world’s largest brewer status.
However, the company has reported dismal earnings for five straight quarters now. In the last reported quarter, the company’s results were significantly hurt by a disappointing Brazilian performance, which in turn was marred by difficult consumer trends and unfavorable currency movements. Negative foreign currency translations were responsible for the 38.4% increase in AB InBev’s cost of sales in the quarter.
Further, management anticipates cost of sales to escalate in 2017 due to lingering currency woes, along with growth of premium brands. This remains a threat for the bottom line. Additionally, a tough macroeconomic environment and volatility in some of the core regions remain concerns for the company, given its consumer-driven business.
While management expects great volatility in some of its core regions, it still projects revenues growth in 2017 to be backed by robust growth of global brands and its commercial plans. That said, let’s wait and see if AB InBev’s steady growth efforts can aid in reviving performance.
What the Zacks Model Unveils?
Our proven model does not conclusively show that AB InBev is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. AB InBev has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.14 per share. While the company’s Zacks Rank #2 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Amazon.com Inc. (AMZN - Free Report) currently has an Earnings ESP of +13.77% and a Zacks Rank #3.
Whole Foods Market Inc. currently has an Earnings ESP of +2.94% and a Zacks Rank #3.
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Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>
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Will AB InBev (BUD) Turn Around Earnings Performance in Q2?
Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, is slated to release second-quarter 2017 results on Jul 27. Last quarter, the company delivered a negative earnings surprise of 26%.
In fact, AB InBev has reported negative surprise in each of the trailing four quarters, with an average miss of 29.3%. Let’s see how things are shaping up for this announcement.
Anheuser-Busch Inbev SA Price and EPS Surprise
Anheuser-Busch Inbev SA Price and EPS Surprise | Anheuser-Busch Inbev SA Quote
What to Expect?
The question lingering in investors’ minds now is whether AB InBev will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is $1.14, reflecting a year-over-year increase of 7.6%. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release. Analysts polled by Zacks expect revenues of $14.5 billion, up 33.9% from the year-ago quarter.
We note that the stock has underperformed the Zacks categorized Beverages – Alcohol industry in the last one month. The company’s shares have inched up 0.8%, while the Zacks categorized industry grew 3.3%.
Factors at Play
AB InBev is on track with the integration of the recently acquired brewing giant SABMiller. The company is currently in the process of divesting SABMiller assets that it promised as part of the merger deal. Despite the divestitures, this combined mega-brewing company still holds the top spot in the beer industry, controlling about one-thirds of the global beer market. This behemoth accounts for nearly 30% of global beer sales and 46% of global beer profits. Further, we laud AB InBev’s robust growth endeavors that have enabled it to maintain its world’s largest brewer status.
However, the company has reported dismal earnings for five straight quarters now. In the last reported quarter, the company’s results were significantly hurt by a disappointing Brazilian performance, which in turn was marred by difficult consumer trends and unfavorable currency movements. Negative foreign currency translations were responsible for the 38.4% increase in AB InBev’s cost of sales in the quarter.
Further, management anticipates cost of sales to escalate in 2017 due to lingering currency woes, along with growth of premium brands. This remains a threat for the bottom line. Additionally, a tough macroeconomic environment and volatility in some of the core regions remain concerns for the company, given its consumer-driven business.
While management expects great volatility in some of its core regions, it still projects revenues growth in 2017 to be backed by robust growth of global brands and its commercial plans. That said, let’s wait and see if AB InBev’s steady growth efforts can aid in reviving performance.
What the Zacks Model Unveils?
Our proven model does not conclusively show that AB InBev is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. AB InBev has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.14 per share. While the company’s Zacks Rank #2 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
McDonald's Corporation (MCD - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com Inc. (AMZN - Free Report) currently has an Earnings ESP of +13.77% and a Zacks Rank #3.
Whole Foods Market Inc. currently has an Earnings ESP of +2.94% and a Zacks Rank #3.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>